Chinese taxpayers have most to fear on Silk Road 16 May 2017 President Xi pledged $124 bln at an international summit to build a modern version of the ancient trading route. Huge global infrastructure spending will burnish Beijing's standing. But the hype could backfire if citizens of the People's Republic fail to reap tangible benefits.
Benettons bulldoze way into toll-road mega-league 15 May 2017 Atlantia, controlled by the Italian family, wants to buy Spanish infrastructure peer Abertis. The target’s main shareholder, Criteria, hasn’t yet backed the deal. Even so, the premium looks more than fair, a counterbid is unlikely, and holding out would leave Criteria stranded.
Australia hands U.S. timely infrastructure example 11 May 2017 An investor group is paying A$7.6 bln for 50.4 pct of Endeavour Energy, a New South Wales electricity distributor. It's an "asset recycling" model that raises private capital against established operations to fund new government investment. Trump's team should take note.
U.S. air-traffic revamp is overdue for boarding 2 May 2017 The White House wants to privatize flight control and overhaul ancient systems at an estimated cost of $35 bln. Canada pioneered a self-funding, stakeholder-governed model. A similar approach could work for America if carriers, politicians and others can dump their baggage.
Buy American crackdown may hurt Build America push 18 Apr 2017 The White House wants to curb the use of foreign goods in U.S. construction projects and procurement. Disregarding global supply chains and relying on arcane definitions of what qualifies as domestic add risk of rising prices. The same is true of Trump's infrastructure plans.
Review: China’s New Silk Road mined with distrust 7 Apr 2017 The People's Republic wants to use its ambitious "One Belt One Road" infrastructure project to build soft power. "China's Asian Dream" by Tom Miller points out the potholes. The country’s search for regional allies is sabotaged by its sense of superiority.
Investors too blasé about grim reaper’s scythe 23 Mar 2017 An activist bet the farm on 72-year-old Hunter Harrison turning around $43 bln railroad CSX in four years. Actuarial tables suggest a real danger he might not. CEOs are becoming grayer, meaning shareholders have become more willing to bear the risk of impromptu corporate changes.
BT split will please all people some of the time 10 Mar 2017 The UK telco has agreed to legally separate its infrastructure business. Rivals said the status quo made them and customers worse off. There is still scope for BT to be too influential in how Openreach runs, but its huge pension scheme would have made a clean break impractical.
Aramco’s IPO merits social engineering discount 10 Mar 2017 The kingdom’s state oil group is about to launch the world’s biggest share offer. It has also just announced plans to invest $4.4 bln in a new industrial city, to create jobs for Saudis. The danger for potential investors is that white elephant subsidies trump a focus on returns.
Suez’s $3.4 bln GE deal just holds water 8 Mar 2017 The French company is paying a higher multiple for General Electric’s H2O unit than recent takeovers even though its target has lower margins. And promised revenue synergies look meager. Cost cuts and a global need for water infrastructure, though, should help this deal flow.
Infrastructure builds Gary Cohn’s White House role 2 Feb 2017 The former Goldman president is drafting a plan to build roads and smart grids, which may be more doable than tax reform. His strong presence and chutzpah make him a Trump favorite. Fixing bridges and airports would solidify his leadership in economic policy over other aides.
Guest view: Fixing finance to repair U.S. roads 19 Jan 2017 Plenty of federal programs exist to help leverage private funds eager to invest in infrastructure and make President-elect Donald Trump's $1 trln plan work, argues lobbyist James Courtovich. What's missing is cooperation in Washington to hold municipal bond issuers accountable.
Viewsroom: Trump’s trickle-down ethics failure 12 Jan 2017 The president-elect's attempt to avoid conflicts of interest while in the White House is window dressing that sets a bad example for his administration. Meanwhile, Trump's shadow hangs over the Detroit Auto Show. And his infrastructure plan is not as straightforward as it seems.
Beware cracks in Trump’s infrastructure plan 11 Jan 2017 Two of the president-elect's advisers have drafted a superficially appealing outline, but tax credits involved are giveaways to businesses and investors. The assumptions are fanciful, too. While new ideas are welcome, spurring $1 trln of funding demands a bigger government role.
NYC infrastructure plan years late, billions short 9 Jan 2017 The New York-New Jersey transport quango has set out a $32 bln plan to upgrade airports, railroads and tunnels. These and ongoing projects like new subways are overdue – and influenced too much by politics rather than real needs. Like trains, officials need to move faster.
Race to build will add impetus to old-world stocks 23 Dec 2016 Infrastructure is one of the few areas where Donald Trump, Angela Merkel and Theresa May will agree in 2017. Not all the numbers bandied about are as big as they sound. But it should create jobs in developed economies – and gee up long-underperforming infrastructure stocks.
Infrastructure dream grounded by Heathrow reality 25 Oct 2016 Britain has finally agreed to add a runway to London’s main airport. Even now, the plan may yet founder. Western democracies face challenges when launching big projects. The benefits of a renewed splurge of infrastructure spending will take decades to materialise.
Telefonica’s tower IPO deserves discount 23 Sep 2016 The Spanish telco giant is selling up to 40 pct of its infrastructure business, valued at up to 3.8 billion euros. Other telecom tower flotations have been warmly received, but the new company Telxius also includes a hard-to-value undersea cable business. That dulls its appeal.
Saudi faces choice of austerity over indulgence 7 Sep 2016 Falling oil prices may lead Riyadh to cut up to $20 bln of infrastructure projects. The risk is it might trigger a construction slump. Of course, Saudi could just increase borrowing and continue building in the desert. Restraint is perilous but would make more financial sense.
Putin is slipping into Crimean economic sinkhole 14 Jun 2016 Russia’s struggle to build a bridge link to Crimea is a microcosm of President Vladimir Putin’s problem: his annexation carries high costs but is yielding meagre benefits. Public discontent risks flaring before September’s parliamentary elections and may spur a new crackdown.